Stocks end higher as Greek deal awaited

By Reuters

Stocks closed higher Tuesday as investors awaited the outcome of discussions on a bailout package for Greece that is critical to the country avoiding a chaotic default.

Though recent data has pointed to stronger-than-expected growth in the United States, helping lift the S&P up almost 7 percent in 2012, investors continue to watch the euro zone for any sign of a setback in dealing with its sovereign debt crisis, which could slow global growth or hit bank profits.

Greece's government is preparing a document with a list of painful reforms needed to clinch a new, 130-billion-euro bailout financing package.

U.S. equities have struggled for direction this week, with questions related to Greece still unresolved, despite Friday's very strong U.S. January payroll report.

"There's a tug of war between fundamentals, which are improving, and the macro backdrop of geopolitical risk from Europe," said Andrew Goldberg, market strategist at J.P. Morgan Funds in New York. "We're still waiting on Greece, but at the same time we're almost being forced to pay attention to the improving data."

A disorderly Greek debt default would almost certainly lead to increased fiscal problems for weaker members of the euro zone and would risk wreaking havoc in credit markets. The impact could also dampen the U.S. recovery.

Boosting the Dow, Coca-Cola Co rose after it reported better-than-expected quarterly results and announced a cost-savings program.

The benchmark S&P 500 index last week marked a fifth straight week of gains on the back of improving U.S. economic data, capped by Friday's payrolls report. Accommodative monetary policy around the world has also helped to fuel the rally.

Technical analysts say that improved medium-term momentum indicators such as a recent move of the S&P 500's 50-day moving average above its 200-day moving average should mean more gains for stocks in the coming months.

Shares of money-market fund operators took a hit on Tuesday after The Wall Street Journal reported that the U.S. Securities and Exchange Commission was finalizing rules meant to stabilize the $2.7 trillion money-market mutual fund sector, including allowing the net asset value of funds to fluctuate.

According to Thomson Reuters data through Tuesday morning, of the 301 companies in the S&P 500 posting results so far, 60 percent topped expectations, tracking below recent quarters at this point of the reporting season.

"Earnings are certainly weaker than prior quarters, especially for companies with overseas exposure, but at the same time that's something that isn't unexpected when you consider the headwinds," Goldberg said.

Federal Reserve Chairman Ben Bernanke on Tuesday renewed a pledge to prevent Europe's financial crisis from damaging the U.S. economy in testimony before Congress that mirrored remarks he made last week.

Source: http://bottomline.msnbc.msn.com/_news/2012/02/07/10343173-stocks-end-higher-as-greek-deal-awaited

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